My point is that as long as they publish their wallet address anyone can check they do actually hold the bitcoin they profess to hold.
EnglishEdward
Deity
And will that apply for other crypto currencies?
RobAnybody
Emperor
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One thing I'm not clear on regarding ETFs & crypto: They appear to let a person buy a fraction of a stock, like "1/10th of Apple + 1/10th of Google + 8/10ths of many random smaller stocks" for much less than it would cost to buy a full share of Apple (over a hundred $) or Google (a few thousand $'s), for people that couldn't afford a whole share of Apple/Google. So I see the benefit, I guess.
But with Bitcoin, for example, you can already buy, like, 1/10000th of a Bitcoin (about $6.15) if you want. You don't need the ETF to buy fractional altcoins. So what's the benefit of allowing ETFs in regards to altcoins that isn't already there?
But with Bitcoin, for example, you can already buy, like, 1/10000th of a Bitcoin (about $6.15) if you want. You don't need the ETF to buy fractional altcoins. So what's the benefit of allowing ETFs in regards to altcoins that isn't already there?
Maybe because being diversified is better and a single fund is convenient.:
- Two or more crypto coins in the same ETF as a way to diversify?
- Mixing Crypto and stocks in the same place and keeping the initial buy in low? Have 3-4 high priced, tech stocks mixed with Bitcoin?
I own the entire S&P 500 in a single fund and that could be an ETF if I choose.
RobAnybody
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I get the diversification angle, but what I'm saying is that if you wanted to spend $145 to buy one share of Apple, you'd have to buy 1 whole share of Apple, so ETFs for stocks can make sense to spread your money into "partial stocks". But if you wanted to spread that same money around & buy 1/1000 of Bitcoin + 1/00 of Etherium + 1 Terra + 10000 SHIBA + I dunno, 2/10 of Litecoin (I'm not sure the math works out exactly), you could already do that. You can buy fractions of altcoins already.
What's the advantage of an ETF consisting of altcoins when you can already buy fractions of them?
What's the advantage of an ETF consisting of altcoins when you can already buy fractions of them?
Moriarte
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The main angle is tax management along with ease of use, as El Machinae mentioned above. Think fund manager with tens of billions to spend. They would need a clear cut pathway, a responsible middleman, who takes on himself nuances of buying, keeping and tax reporting. It is known that this type of “customer” is the main spender in the world of finance. Retail investors are a drop of water, in comparison. Hence the enthusiasm about “big money” finally finding a segway into the crypto vault.
Careful what NFTs you accept
An investigation was triggered after a number of cryptowallets belonging to customers of the largest NFT exchange OpenSea got mysteriously emptied. Researchers at security shop Check Point found a nasty form of NFT was in circulation, one that came with its own malware package.
People were receiving free NFTs from an unknown benefactor, but when they accepted the gift the attackers got access to their wallet information in OpenSea's storage systems. The code generated a pop-up, that if clicked, allowed wallets to be emptied.
After disclosing the issue Opensea had a fix sorted within an hour - we wish others took such prompt action - and the platform appears to be secured. But beware of "free" gifts, particularly where money is involved.
People were receiving free NFTs from an unknown benefactor, but when they accepted the gift the attackers got access to their wallet information in OpenSea's storage systems. The code generated a pop-up, that if clicked, allowed wallets to be emptied.
After disclosing the issue Opensea had a fix sorted within an hour - we wish others took such prompt action - and the platform appears to be secured. But beware of "free" gifts, particularly where money is involved.
I assume there are people working on a Crypto Index, if one doesn't already exist?
Yeah, I am not sure I'd trust it until a Vanguard product comes out!
This last two years has been horrible to watch. I've been trying to buy a house and so have had a lot of capital, but not dared do anything with it.
I've seen fortunes lost and made repeatedly, but my risk appetite was just not there. I did dabble in GME and doubled my money in a week.. If I'd dumped it all in xoins a few years back I could buy a dozen houses!
This last two years has been horrible to watch. I've been trying to buy a house and so have had a lot of capital, but not dared do anything with it.
I've seen fortunes lost and made repeatedly, but my risk appetite was just not there. I did dabble in GME and doubled my money in a week.. If I'd dumped it all in xoins a few years back I could buy a dozen houses!
Another rather mainstream benefit of an crypto ETF is that I can purchase it using my stock-buying software. There's nothing separate for me to handle. I would also think that they'd be better at not having their alt-coins stolen than I am, but that's just a guess.
I can easily see why someone wouldn't have much value on that front. But the Boomers who are buying crypto are going to be buying them with ETFs. So, if you're looking for your Greater Fool, it's them. They'll be buying diversified packages, thinking that diversifying on crypto is the way to create a small hedge. Basically, you're waiting for the world where a Boomer puts 1% of their assets in crypto to match their 2% gold hedge.
I can easily see why someone wouldn't have much value on that front. But the Boomers who are buying crypto are going to be buying them with ETFs. So, if you're looking for your Greater Fool, it's them. They'll be buying diversified packages, thinking that diversifying on crypto is the way to create a small hedge. Basically, you're waiting for the world where a Boomer puts 1% of their assets in crypto to match their 2% gold hedge.
Bitcoin ETF Poised to Launch
ProShares prepares for the debut of its fund, with others expected to follow
BY MICHAEL WURSTHORN
The first bitcoin exchange-traded fund is expected to start trading Tuesday, making the most widely traded cryptocurrency available to most investors with a brokerage account. Here is a look at what it means.
ProShares filed plans Friday, laying the groundwork for the launch of its Bitcoin Strategy ETF. Other funds are expected to follow over the next two weeks as the Securities and Exchange Commission considers proposals made in August by asset managers Valkyrie Investments, Invesco and VanEck to sell bitcoin ETFs to investors. The companies don’t expect their proposals to be turned down, according to people familiar with them, though the SEC could approve, disapprove or defer any of the applications.
ProShares prepares for the debut of its fund, with others expected to follow
BY MICHAEL WURSTHORN
The first bitcoin exchange-traded fund is expected to start trading Tuesday, making the most widely traded cryptocurrency available to most investors with a brokerage account. Here is a look at what it means.
ProShares filed plans Friday, laying the groundwork for the launch of its Bitcoin Strategy ETF. Other funds are expected to follow over the next two weeks as the Securities and Exchange Commission considers proposals made in August by asset managers Valkyrie Investments, Invesco and VanEck to sell bitcoin ETFs to investors. The companies don’t expect their proposals to be turned down, according to people familiar with them, though the SEC could approve, disapprove or defer any of the applications.
New ETF proposals are subject to a 75-day SEC review period. If regulators don’t object, the funds are considered cleared for trading. Monday marks the end of the review period for the ProShares fund. Following the initial four entities this month, five other firms have applied with the SEC to list similar funds. The asset-management industry has been pushing for years to sell a bitcoin ETF, seeking to cash in on a surge in the value of digital currencies. Some in the industry say investors should “allocate” to crypto, which means devoting some small amount of their portfolios to the asset class to boost returns and diversify holdings. A bitcoin ETF would make it easier to do so, according to people in the industry.
What are bitcoin ETFs?
An exchange-traded fund is an investment that tracks the price of a basket of underlying assets and is tradable on U.S. stock exchanges. In this case, the funds would track the price of bitcoin futures traded on the Chicago Mercantile Exchange, rather than bitcoin itself.
Why are these ETFs futures- based?
These funds won’t hold actual bitcoins. Instead they will deal in bitcoin futures, which trade separately on regulated U.S. exchanges such as CME. Regulators prefer futures-based ETFs because the SEC lacks jurisdiction over crypto trading venues that aren’t registered as exchanges in the U.S. The SEC says that leaves investors vulnerable to fraud because regulators have no insight into where bitcoins are coming from and how prices are being determined. The SEC hasn’t approved exchange- traded funds that hold cryptocurrencies directly, and the agency has suggested it wouldn’t back such a move now.
What else is in these funds?
ProShares said in its prospectus that the fund will primarily invest in bitcoin futures. Previously the firm planned to also buy shares of Canadian ETFs and pooled investment trusts that hold bitcoin as a way of gaining a more direct line of exposure to the actual coins.
Other asset managers, including Invesco and VanEck, have proposed holding similar assets beyond bitcoin futures. The SEC has indicated that it prefers futures-based ETFs for crypto, because of the surveillance considerations, so there is some expectation in the industry that all of the funds will end up as plain-vanilla bitcoin futures ETFs. ETFs appeal to investors who want to buy a bundle of assets easily. Otherwise, investors would have to buy them directly.
The cryptocurrency has surged recently, with fans contending that the launch of an ETF would increase bitcoin’s legitimacy. IMAGE FRANCE-PRESSE/GETTY AGENCE
Is there a trade-off with futures?
Some crypto enthusiasts complain that futures-based ETFs won’t track bitcoin perfectly because of the costs of buying and selling futures contracts and other concerns. They contend that investors in bit-coin futures ETFs could be saddled with substandard performance if crypto keeps rising.
Is this why bitcoin is going crazy?
Yes. Bitcoin has surged in recent days, with fans contending that the launch of a bitcoin ETF would increase the cryptocurrency’s legitimacy and make it easier for institutional investors to get exposure.
I see no reason to believe that is true. Not Your Keys, Not Your Coins.
As of [May 22, 2020], there have been approximately 45 exchange hacks resulting in cumulative losses of about $1.85 billion.
Coin exchanges are the Wild West, or have been the last few years. If mainstream trackers from the likes of Vanguard come out I would fully trust them not to be a risk compared to all the different exchanges that have come and gone the last few years.
It is an interesting question how they do key management:
- Does only one person have the key? What if they are hit by a bus?
- Do multiple people have the key? Do we trust them all?
- Are they using some key splitting mechanism or multi sig wallet? What parameters have been chosen?
- Is there some hardware lock involved? What about equipment failure?
warpus
In pork I trust
What's the deal with ETFs and taxes? From what I understand crypto taxes are dealt with in almost the exact same way as stocks.. So.. if you wait a year, you pay 10% on 50% of your gains, but if you trade your coins before that, your gains essentially count as regular income.
If ETFs give you tax benefits then I can see the appeal, even if you are not buying a diverse ETF (i.e. if it's just bitcoin or whatever)
I'm not speaking as any type of expert, but it is incredibly easy to purchase an ETF in my TFSA, using stock purchase software. It's in the list of things that are easy to buy.
Then I don't worry about taxes at all.
Then I don't worry about taxes at all.
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You could buy 1/10000th of a Bitcoin, but you would have to pay the transaction fee (50% of the price right now, the maximum this year would have been 1000%). An ETF could pool the transaction cost, so the purchase could be much cheaper for you.
When you use for example coinbase you do not pay the transaction fee either to buy it or to move it to another exchange. I guess they have enough volume that each individual transfer can be done off chain. I guess to move it to your own wallet you would have to pay.
Well, yeah, the point is to move it off-chain, because the real coins are not a good currency. But then you have to choose who should handle those coins for you and a regulated ETF might be the better choice.
